Master Degree Project in Logistics and Transport Management
Crowd-shipping in Geneva
Exploratory and descriptive study of Crowd-shipping
Mickael Briffaz and Clément Darvey
Abstract
Last decades have shown that urban mobility is becoming an issue in a context of growing environmental awareness among the general public. The Courier Express and Parcel industry represents a significant part of the urban transportation. With the emergence of the sharing economy, crowd-shipping is perceived as a promising alternative allowing to use the current transport capacity more efficiently.
The sharing or collaborative economy has attracted growing attention in the literature of the recent years, with only a small proportion discussing crowd-shipping. The purpose of this thesis is firstly to study was has been done in the area of crowd- shipping, under the framework of an exploratory study. Then, under the framework of a descriptive study, the authors investigate the concrete situation of Geneva and the relevance of crowd-shipping for the stakeholders of the area.
This paper shows the barriers, challenges and benefits linked to the implementation of crowd-shipping. In addition, the authors discuss the most relevant crowd-shipping services for the area of Geneva, with respect to the expectations of different stakeholders.
Keywords:
Urban logistics, Last-mile delivery, Geneva, Crowd-shipping, Crowdsourced delivery
Acknowledgements
We would like to firstly thank our supervisor Michael Browne for his continuous support and availability, as well as his precious advices throughout this work. We give our thanks to the interviewees: Jean-Francois Gaudin, Nilukshan De Silva, Alain Philippe, Christophe Canevet and Andreas Berney for their contributions to this paper.
We also want to thank all the respondents who took part in our survey.
We are grateful to our family, our girlfriends Julie and Lisa, for their support and presence. We also want to thank our friends, especially Angelica and Carl-Henrik for their contribution to our academic knowledge.
We are thankful to Sweden and the School of Business, Economics and Law of Gothenburg, for their acceptance of foreign students and the quality of education provided.
Finally, we would like to thank each other for our personal commitment in this thesis, which contributes to reinforce our friendship.
_______________ _______________
Briffaz Mickael Darvey Clément
Gothenburg, 2nd of May 2016
Table of Content
List of Tables ... V
List of Figures ... V
1 - Introduction ... 1
1.1 Introduction to crowd-shipping ... 1
1.2 Background ... 2
1.3 Problem discussion ... 3
1.4 Motivation and purpose ... 3
1.5 Research questions ... 4
1.6 Delimitations ... 4
1.7 Thesis layout ... 5
2 - Literature Review ... 6
2.1 Urban mobility ... 6
2.1.1 Urban transportation ... 6
2.1.2 Urban logistics ... 7
2.1.3 Urban transport regulations ... 10
2.1.4 Last-mile delivery ... 11
2.2 Courier, Express and Parcel Sector ... 12
2.3 Transport and the crowd ... 15
2.3.1 Sharing economy ... 15
2.3.2 Crowd-logistics ... 17
2.3.3 Crowdsourced delivery ... 17
2.4 Summary of literature review ... 20
3 - Methodology ... 21
3.1 Research philosophy ... 21
3.2 Research classifications ... 22
3.3 Research strategy ... 23
3.4 Data collection ... 24
3.5 Limitations of the research design ... 25
3.5.1 Reliability ... 26
3.5.2 Validity ... 26
3.5.3 Generalizability ... 26
4 - Crowd-shipping around the globe ... 27
4.1 Best practice ... 27
4.1.1 Postmates ... 27
4.2 “In progress” Practices ... 29
4.2.1 You2you ... 29
4.2.2 Voisins Relais ... 31
4.3 Discontinued practices ... 34
4.3.1 Bringbee ... 34
4.3.2 DHL MyWays ... 36
6 - Current situation in Geneva ... 41
6.1 The city of Geneva ... 41
6.2 Mobility and infrastructures ... 42
6.2.1 Current mobility situation ... 42
6.2.2 Solutions for a better mobility: what have been done so far? ... 45
6.2.3 Solutions for a better mobility: what is expected? ... 46
6.3 CEP industry ... 48
6.3.1 Example of DHL Express ... 48
6.3.2 Innovations in the industry ... 49
6.4 Regulations ... 51
6.4.1 Transport ... 51
6.4.2 Sharing economy ... 52
7 - Crowd-shipping in Geneva: stakeholders analysis ... 54
7.1 Stakeholders presentation ... 54
7.2 The “crowd” ... 55
7.2.1 Results of the survey ... 55
7.2.2 Lessons learned from the survey ... 58
7.3 Transport providers ... 59
7.3.1 TNT ... 59
7.3.2 DHL ... 59
7.3.3 Planzer ... 60
7.3.4 Lessons learned from interviews ... 61
8 - Findings of the descriptive study ... 62
8.1 Categorization and discussion ... 62
8.1.1 Last-”meter” crowd-shipping ... 62
8.1.2 Last-”mile” crowd-shipping ... 63
8.1.3 Crowd-”shopping” ... 64
8.2 Assessment of relevance ... 65
8.3 Recommendations ... 66
9 - Conclusion ... 68
References ... 70
Appendices ... 80
Appendix A - Guidelines ... 80
Appendix B - Questions for the survey ... 83
Appendix C - Supporting letter ... 84
List of Tables
Table 1 : Business models in Crowd-shipping ... 19
Table 2 : Interviews ... 25
Table 3 : Trip purpose ... 43
Table 4 : Categories presentation ... 62
Table 5 : Assessment of relevance ... 65
List of Figures
Figure 1 : Organization of the paper ... 22Figure 2 : How it works for Postmates ... 28
Figure 3 : How it works for You2you ... 30
Figure 4 : How it works for Voisins Relais ... 32
Figure 5 : How it works for Bringbee ... 35
Figure 6 : How it works for DHL MyWays ... 37
Figure 7 : Location of Geneva ... 41
Figure 8 : Repartition of transport modes used in Geneva in 2009 ... 43
Figure 9 : Commercial speed of urban public transport ... 44
Figure 10 : Trend for the use of vehicles in 2030 in Geneva ... 46
Figure 11 : My Post 24 machine ... 49
Figure 12 : Electric cargo-bike ... 50
Figure 13 : Swiss Post Drones ... 50
Figure 14 : Cargo sous terrain ... 51
Figure 15 : Willingness to use crowd-shipping services ... 55
Figure 16 : Involving traditional transport providers ? ... 56
Figure 17 : Encouraging factors ... 57
Figure 18 : Willingness to transport parcels ... 57
Figure 19 : Usefulness for Geneva ... 58
1 - Introduction
This chapter introduces the reader to the crowd-shipping and its connections with the Courier, Express and Parcel industry (CEP) as well as the sharing economy. A short description of the city of Geneva follows. Furthermore, the chapter provides insight in the research background, problem discussion and the purpose. Finally the chapter shall acquaint the reader with the research questions and the delimitations of this study.
1.1 Introduction to crowd-shipping
According to the World Urbanization Prospects report (UN, 2014), more people live in urban areas than in rural areas. In 2014, more than 54 per cent of the world’s population live in a city, and this share is expected to reach 66 per cent by 2050 (UN, 2014). Although the southern hemisphere concentrates the largest cities in the world, the most urbanized areas are located in the northern, with 82 per cent of North Americans and 73 per cent of Europeans living in cities (UN, 2014).
In this context, urban areas had to face an increasing demand for all types of mobility.
Urban logistics has been seen as a solution, aiming to reduce the clash between the interests of logistics companies and the interests of other stakeholders involved in urban mobility defined in part 2.1.2 (Muñuzuri et al., 2005). Also, the authorities are becoming increasingly concerned about sustainability, and how urban logistics can meet the policy makers’ sustainability objectives has become an issue (Anderson, Allen and Browne, 2005). Urban mobility has an undeniable impact on the environment, it accounts for 40 per cent of all CO2 emissions of road transport in Europe (European Commission, 2015).
One part of the urban traffic is generated by the courier, express and parcel (CEP) industry. The European’s CEP industry has experienced a steady growth during the past years, and this trend is likely to continue (AtKearney, 2015). This growth is supported by e-commerce which continues to fuel both domestic and international business-to-consumer (BtoC) flows. As more e-commerce specialists are present, the competition is fierce and these companies try to provide customers with shorter delivery times and easier returned shipments. According to AtKearney (2012), this situation is leading to alternative solutions, and those innovative solutions should have a significant impact on the competitive CEP market.
The last few years have seen the emergence of the crowd logistics, as a result of the development of the sharing economy. Crowd logistics is defined as: “ The outsourcing of logistics services to a mass of actors, whereby the coordination is supported by a technical infrastructure. The aim of crowd logistics is to achieve economic benefits for all stake- and shareholders” (Mehmann, Frehe and Teuteberg, 2015). The
crowdsourced delivery or crowd-shipping is rooted in the crowd logistics. It is an answer to the growing customers’ needs in terms of speed, personalization and costs, and can already be considered as a competitive alternative to the traditional CEP providers described in part 2.2 (Rougès and Montreuil, 2014; Mehmann, Frehe and Teuteberg, 2015; Carbone, Rouquet and Roussat, 2015).
1.2 Background
The sharing or collaborative economy has attracted growing attention in the literature of the recent years, with a small proportion discussing the crowd-shipping. Among this literature, academic researches about crowd-logistics have mentioned crowd-shipping as an innovative service, that could be an alternative to the traditional delivery service (Mehmann, Frehe and Teuteberg, 2015; Carbone, Rouquet and Roussat, 2015).
Crowd-shipping has also been mentioned recently in research papers focused on the last-mile deliveries, either in the context of grocery retailing, or more largely online retailing. Crowd-sourced delivery is always seen as innovative concept or solution, which can be used as the last “leg” of traditional transport in online retailing, or as a bridge between physical retailer and consumer (Hübner, Kuhn and Wollenburg, 2015;
Slabinac, 2015; Chen and Pan, 2015). Also, only one academic paper based on a practical case has been retrieved (Paloheimo, Lettenmeier and Waris, 2015). This paper presents a case study of the application of crowdsourced deliveries to a library in Finland, aiming to know if crowdsourced deliveries can be applied to an existing consumer service, and if there are real sustainability benefits. The result of this study shows that if this trial could be applied to half of the shopping and library trips in Finland, the related footprint reduction would be of 4 per cent. In addition to the potential reduction in environmental impacts, this paper mentions that crowdsourced deliveries are also sustainable in terms of social cohesion since users have to interact and trust each other. Crowd-shipping has also been the main subject of two research papers published during the last three years (Rougès and Montreuil, 2014; Lam and Li, 2015). Both of them describe crowdsourced delivery, including advantages and challenges, and introduce different already existing solutions. In addition, one of them introduced five business models to “reinvent deliveries”, while the second paper brings a special focus on the Chinese delivery market.
Crowd-shipping is a quite recent topic, and despite few researches conducted, a gap has been identified in the literature review of this paper. Therefore, this paper aims firstly to make a contribution regarding the implementation of crowd-shipping, drawing on different practical cases, in order to understand the impacts and challenges resulting from these implementations. Secondly, this paper will help to identify which service of crowd-shipping could be the more relevant for the specific area of Geneva according to the stakeholders expectations.
1.3 Problem discussion
In 2013, 5.4 billion shipments have been handled by the courier, express and parcel actors in Europe (AtKearney, 2015). A substantial part of the shipments have transited through cities, causing unwanted effects for the urban areas’ stakeholders. The introduction of crowd-shipping would contribute to regulate the flow of vehicles in urban area, by transporting parcels via individuals on their daily routes for the last- miles of the deliveries. Such services are likely to decrease the amount of transport vehicles into the area, hence saving space and reducing traffic problems.
However, crowd-shipping is a very new and disruptive service, and regulations may be a barrier for the introduction of such a solution. Indeed, some people have argued that the impact will be limited and will also have legal problems and challenges (Hübner, Kuhn and Wollenburg, 2015).
Geneva is the second largest city of Switzerland, with approximately 200,000 inhabitants (Ville de Genève, 2015). The area hosts 22 international organizations (Genève, n.d.), and is a very attractive place for multinational companies mainly for economic reasons (Genevabusinessnews, 2010). Due to its geographical situation and economic attractiveness, the area is also subject to a daily flow of border workers coming from France, contributing to traffic congestion. Moreover, Geneva is a mono- centric urban area, with a high concentration of residents and jobs in a small space making it one of the European urban heart with the highest density (Direction générale de la mobilité, 2013). The high density of the city combined with the intense economic activities necessarily involve substantial urban goods transport, contributing to the city’s congestion. The city’s authorities are aware of these issues, they described their strategy in a report from 2013 called “Mobilités 2030” (ibid.). As an answer to these problems, some solutions are already trialled by the authorities such as the smart parking solution “smart city” (FAO, 2015). In the light of the mobility issues in Geneva, and the authorities and stakeholders’ awareness, the authors believed it could be a suitable place to study the potential impacts of crowd-shipping.
1.4 Motivation and purpose
This thesis topic has been chosen by the authors among propositions made to the students of the Master of Science in Logistics and Transport Management at the School of Business, Economics and Law of the University of Gothenburg (Sweden).
Therefore, this thesis is not commissioned by any company or organization and is not under undue influence. The authors have been motivated by their own interest in the sharing economy and logistics that are brought together in crowd-shipping.
The purpose of this thesis is first to study what has been done in the area of crowd- shipping, under the framework of an exploratory study. Considering that this is a quite recent topic, existing crowd-shipping cases will be analysed in order to figure out what are the different practices and what could be learn from them. Also, this paper aims to
bring understandings about the consequences arising with the implementation of crowd-shipping. Then, under the framework of a descriptive study, the authors will investigate the concrete situation of Geneva and the relevance of crowd-shipping for the different stakeholders involved. Globally, this paper should shed light on crowd- shipping and could be used as a support for decision makers in urban mobility.
1.5 Research questions
RQ1: What are the barriers and challenges regarding the implementation of crowd- shipping ?
RQ2: What are the benefits of the implementation of crowd-shipping ?
RQ3: Could crowd-shipping practical cases from other countries or cities possibly be relevant for the area of Geneva, according to stakeholders expectations and the current situation of the city?
1.6 Delimitations
The use of delimitations is necessary to circumscribe the field of investigation, and, as stated by Collis and Hussey (2014), it establishes the scope of the research.
First, since the research is focused on crowd-shipping within the urban area of Geneva, the choice was made to limit this study on the “last-mile” of the delivery.
Therefore, only crowd-shipping services focusing on the “last-mile” deliveries will be considered in the study.
Second, the authors decided to focus the study on the courier, express and parcel (CEP) industry. Even if it represents only one part of the urban freight transport, this sector is the most concerned by crowd-shipping. Indeed, most of the goods transported are of reasonable size and weight, which make them transportable by the “crowd” on their journeys (e.g. commuting, shopping trips etc.). Crowd-shipping services focusing on other types of goods are therefore excluded from this study.
Third, the city of Geneva was found suitable for this study due to several reasons:
reasonable size, extremely dense urban centre and proven traffic issues. Thus, some outcomes of this thesis are especially related to this city. However, it does not mean that the results could not be interesting and relevant for other cities experiencing similar issues.
Finally, the terms “crowd-shipping” and “crowdsourced deliveries” are cited continually throughout this paper. Even if slightly different definitions can be found in the literature, they are used reciprocally in this paper, and the chosen definition can be
1.7 Thesis layout
This paper is organized in nine chapters. The authors introduced the topic, described the background, purpose and research problem, as well as presented the research questions and the delimitations in this first chapter. Then, a literature review covering pertinent themes with respect to the thesis subject will take place in the second chapter. Urban mobility, the courier express and parcel delivery industry and the sharing economy within transportation will be discussed. The authors will discuss the chosen methodology in the third chapter, and legitimize its use according to the research philosophy and strategy. Afterward, different practical cases of crowd- shipping will be under study in chapter four. The chapter five will discuss the findings of the exploratory study drawing on the literature review and the cases study. The current situation in Geneva and the stakeholders analysis will form the chapters six and seven. Finally, the findings of the descriptive study gathering information from chapter six and seven will be presented in chapter eight, followed by the conclusion of the paper in chapter nine.
2 - Literature Review
This chapter reviews existing theories and essential concepts in regards to the paper’s topic: crowd-shipping and its implementation. The chapter will provide a deeper understanding of the environment related to crowd-shipping with a description of the urban mobility, the CEP sector and the sharing economy in transport. Furthermore, the chapter will introduce the potential barriers, challenges and benefits concerning the implementation of crowd-shipping found in the literature.
2.1 Urban mobility
2.1.1 Urban transportation
According to the European Commission (2015), more than 60% of European citizens live in an urban area of over 10 000 inhabitants nowadays. As argued by Montgomery (2008), this proportion is projected to reach two-thirds of the world population by 2050, with world's total population expected to grow by 1.76 billion persons between 2000 and 2024 where 86% is projected to take place in cities or towns. The reasons are the globalisation, the attraction of international network and the greater importance of local governments. This increased population in cities involved some challenges regarding transportation for the authorities. Indeed, according to European Commission (2015), urban mobility accounts for 40% of all CO2 emissions from road transport and in the current trends of greener towns and cities, the question of urban mobility open a "broad debate". So mobility optimization while reducing at the same time "congestion, accidents and pollution" is a known challenge for major cities in Europe. In addition, Muñuzuri et al. (2005) discussed the challenges regarding the freight transport in cities, which is a growing sector as well due to the population growth. According to Ogden (1989) urban freight transport is:
"The transportation of, and terminal activities associated with, the movement of things as opposed to people in urban areas. It includes movement of things into and out of the area, through the area, as well as within the area by all modes, including transmission of electricity to the extent that it relates to the transportation of fuels, pipeline movement of petroleum, water and waste, and collection and movement of trash and mail, service truck movements not identified with person movements, and even some person trips which involve substantial goods movements such as shopping trips. Activities involving urban streets, waterways, railroads, terminals, loading docks, and internal distribution systems including elevators and related facilities must all be considered in fostering greater efficiency in the movement of urban goods." (Ogden, 1989, p. 12 as cited in Allen et al., 2000, p. 20).
According to Anderson, Allen and Browne (2005), urban freight transport is important
industries in the region concerned and the total costs of freight transport and logistics pay a significant role regarding the efficiency of the economy. However, Cristea et al.
(2013) observed that road freight vehicles transporting goods in urban areas generally emit more emissions (Greenhouse Gas) than typical motor vehicles such as cars and motorcycles. This is due to the higher consumptions per kilometres of vehicles such as trucks and to the fact that those vehicles generally use diesel as fuel.
Both existing freight and passenger transport in urban areas create different impacts regarding the society. These negative impacts could be categorised as follows:
"1. Negative environmental impacts 2. Negative social impacts
3. Negative economic impacts [...] "
(Allen et al., 2000b, p. 72 as cited in Muñuzuri et al., 2005). According to Muñuzuri et al. (2005), only the costs of "environmental nuisance" from the pollution due to the increasing traffic in European cities amounts almost 100 billions Euros per year which is 1% of GDP of European economy.
2.1.2 Urban logistics
The urban flow of freight has been discussed through several terms: "urban goods movement, urban freight transport and city logistics" (Slabinac, 2015). The concept of city logistics or urban logistics has been defined by Taniguchi, Thompson and Yamada (1999 as cited in Ehmke 2012, p. 13) as "(...) the process for totally optimizing the logistics and transport activities by private companies in urban areas while considering the traffic environment, the traffic congestion and energy consumption within the framework of a market economy." This optimization is, according to Russo and Comi (2012), a way to counter the impacts due to the increasing rapid freight transportation which create congestion, air pollution, noise and raise the logistics costs and thus higher the price of products. However, even if the freight movements are relevant in the support of economic life in urban areas, urban logistics often play a secondary role in city planning priorities (Muñuzuri et al., 2005).
According to Russo and Comi (2012) this could be explained by the two conflicts of interest in urban areas represented by the public authorities on the one hand, and the private companies on the other hand. Indeed, the public authorities want to reduce the transportation impacts in order to improve the lifestyle of inhabitants and visitors and in contrast private companies want to pick up and deliver the goods at the lowest costs with the highest quality in order to respond to customers' expectations. So analyses and implementations of such measures of optimization have to take into account different points of view of stakeholders involved which is critical for the success of urban logistics (ibid.).
• Transport capacity
Regarding the capacity, according to Hesse (2008), cities were historically shaped in function of cars and rails transportation. The current urban road network has been
built without consideration for logistics activities (Ertrac, 2014). Indeed, nowadays with the development of the motor trucks, the capacity is not anymore suitable and creates congestion. As stated in the European express association report (2015), the growth of e-commerce has accentuated the development of trucks on roads which continue to increase the urban deliveries/pick up and consequently congestion. This "non-fluidity"
in urban areas is an obstacle for an effective urban delivery network which is a key support for the development of e-commerce in Europe. So the question of capacity of the roads is crucial for the development of urban logistics. As stated by Hesse (2008), there are two possibilities when a willingness to increase the fluidity of transportation is found, the first one is about building more roads which is quite impossible when regarding the density of cities. The second one is about decreasing the traffic on the roads.
Regarding the second possibility, Arvidsson (2013) described the problematic of efficiency in freight transport. He defined the efficiency in freight transport as “a set of utilization measures of time, space, vehicle, fuel and driver in the movement of goods". Dablanc (2006) argued that freight flows including consumer goods, building materials, waste products, postal mail and others, occupy about one fourth of the street traffic in urban areas. Regarding the efficiency of this flow some improvements can be done. Indeed, according to McKinnon (1996), 30% of road transport distance is running empty. This is, according to Arvidsson, Woxenius and Lammgård (2013), called the "back-haul effect" which is occurring when the demand is asymmetric in volume at a certain time. In addition to the freight transport, the passenger mobility has also some weaknesses regarding the efficiency. As stated by Bubner, Helbig and Jeske (2014), 60% of the available transport capacity is currently not used, it includes the rails, roads and private cars. It shows that private cars are not used efficiently and thus catch some space on roads which create congestion. So according to the Ertrac report (2014), the challenge today is to find how the same capacity of roads can be used more efficiently in order to have a better flow of vehicles.
• Transport optimization
As stated earlier in the literature review, the concept of urban logistics has been defined by Taniguchi, Thompson and Yamada (1999 as cited in Ehmke 2012, p. 13) as the optimization of the logistics transport activities. According to Muñuzuri et al.
(2005), solutions related to the optimization of urban logistics are not defined from the transport companies' point of view. The improvements are most of the time defined by the point of view of urban commodities and the relation between the general urban traffic and the freight transport. Adding to this, the use of solutions to deal with urban logistics is often not beneficial for logistics companies. Indeed, they are developed with the aim to regulate and manage freight deliveries in urban areas (Muñuzuri et al., 2005). This could lead, as stated by Taniguchi, Thompson and Yamada (2012), to
decision tools can be the Multi Actor Multi Criteria Analysis (MAMCA) method proposed by Macharis, de Witte and Ampe (2009).
Muñuzuri et al. (2005) described five different groups of solutions regarding the urban freight. These solutions are: " related to public infrastructure, to land use management, to access conditions, to traffic management and related to enforcement and promotion". Regarding the optimization of the urban traffic, new infrastructures can be built or adapted in order to host more capacity. In addition, new or existing buildings as terminals can be reorganised to facilitate the deliveries. Finally, according to them, cooperation can be promoted by the city authorities in order to fluidize the flow of vehicles on roads. But again, as stated by Russo and Comi (2012), an optimal balance between the interests of different stakeholders must be found in order to initiate any solution of optimization for the urban logistics.
• Transport externalities
The environmental impact is described as one of the impacts due to the transportation of freight and passenger in urban areas (Allen et al., 2000b, p. 72 as cited in Muñuzuri et al., 2005). Indeed, according to Russo and Comi (2012), urban areas are responsible for 80% of the Greenhouse Gas (GHG) emissions and consume about 70% of the energy. On its side, urban mobility accounts for 32% of energy consumption and 40% of CO2 emissions of road transport. The congestion of urban areas is mostly responsible for this increase pollution for the environment and as stated by Silvia and Ribiero (2009), the emissions are dangerous for the health of the population where they are responsible for 70% of the cancerous and other dangerous substances. However, as mentioned by Santen (2013), environmental issues are not prioritized by logistics companies where operational performance remains the most important.
Usually, three types of actions are categorized when a transport company wants to limit its emissions. The first one is regarding the reduction of the environmental impact of each vehicle, the second one is about the use of more environmentally mode of transport and finally the third one is about decreasing the need of transport (Santen, 2013). According to Arvidsson, Woxenius and Lammgård (2013), most of the environmental benefits results from the third action and less kilometres to drive for the road haulier.
Additionally to the environment, logistics activities affect as well the population through economic and social impacts. Indeed, Sathaye et al. (2006) described these impacts by increased traffic congestion, a negative public health impacts of pollution and a growing risks for road accidents. Moreover, noise and visual intrusion are stated as well as a deterioration of buildings and infrastructures due to logistics activities.
Arvidsson, Woxenius and Lammgård (2013) stated that the past decades have shown an increased awareness regarding the environmental problems. This is due to the
local authorities which are focusing on making urban freight transport more sustainable (Quak and de Koster, 2009). Indeed, Anderson, Allen and Browne (2005) distinguish two ways to do so. The first one is to "force companies to become more sustainable by introducing environmental policies" and the second one is "by initiating company driven-change that reduces the unsustainable impact of transport as a result of some internal benefit". In addition from a national perspective, Arvidsson et al.
(2013) described some regulatory measures taken by governments regarding fuel economy standards, vehicle emission standards and fuel quality standards.
2.1.3 Urban transport regulations
Urban freight transport is essential to the economic vitality of the cities, but is also the source of several negative impacts (Anderson, Allen and Browne, 2005). In this context, cities and administrations have implemented policies and regulations to mitigate the negative economic and environmental impacts of urban freight transport (Russo and Comi, 2010; Stathopoulos, Valeri and Marcucci, 2012). As mentioned by Muñuzuri et al. (2005), these regulations aim to reduce the “clash” between the different stakeholders involved, and therefore do not favor logistics companies especially. In order to make the introduction of policies and regulations easier, Stathopoulos, Valeri and Marcucci (2012) argue that every stakeholder must be considered.
Among the urban transport regulations, time access regulations and vehicle restrictions are the most common, especially in Western Europe (Quak and de Koster, 2009). Many cities use delivery time windows to regulate the access to the city centres, especially the pedestrian zones (Russo and Comi, 2010). These measures aim to prevent goods vehicles to circulate when it could disturb pedestrians or other road users (Anderson, Allen and Browne, 2005). Different approaches have been identified by Russo and Comi (2010), while some cities encourage deliveries during the day at certain times (e.g. outside of the peak hours), other cities encourage night- time deliveries under certain conditions such as the use of appropriate noiseless vehicles. Other forms of time access regulations charges transport providers during a period of the day, and the access is free of charge during the remaining time (Russo and Comi, 2010).
Vehicle restrictions can be applied according to the weight, space occupancy, size, volume or emissions (Anderson, Allen and Browne, 2005; Muñuzuri, 2005; Dablanc, 2008; Russo and Comi, 2010). The objective of these restrictions is to change the type of vehicles on the city roads, to reduce traffic congestion and air pollution (Russo and Comi, 2010). An example is the low emission zones (LEZ) where high-polluting vehicles are banned. They have been established to reduce air pollution, and to encourage transport providers to buy cleaner vehicles (Anderson, Allen and Browne,
(Anderson, Allen and Browne, 2005). Even if this restriction is common, it has been argued by Anderson, Allen and Browne (2005) and Russo and Comi (2010) that it might lead to more trips performed by smaller vehicles, resulting in longer distance travelled and higher level of emissions.
Another type of regulation is called road-pricing or congestion charging (Anderson, Allen and Browne, 2005; Russo and Comi, 2010). This system can either allow all users willing to pay to access a certain area, or allow only a certain user category against a fee. The objective of this type of regulation is to reduce the congestion in dense urban area, and also to reduce emission levels (Anderson, Allen and Browne, 2005). Although urban transport providers can be affected by these measures, Russo and Comi (2010) mentioned that it aims primarily to regulate passenger traffic. Finally, many other forms of regulation have been mentioned in the literature. One example can be the creation of sub-network for freight vehicles, by allowing access to restricted areas such as bus lanes, parking spaces for disabled people, taxi-zone etc. (Muñuzuri et al., 2005; Russo and Comi, 2010). The creation of incentives to increase the efficiency of the transport could also be mentioned. In this case, transport providers operating with a load-factor not high enough would lose the incentives offered by the authorities. (Russo and Comi, 2010).
2.1.4 Last-mile delivery
According to Slabinac (2015), the last-mile delivery represents the last part of the supply chain which is considered to be the most inefficient part due to its specificities.
Indeed, specificities such as "spatial distribution of relatively small receiving points, demand for frequent but small shipments and delivery time windows" strengthens the difficulties to deliver goods to customers in time with lower costs. The delivery of the final product to the customer's door is seen as the most challenging part regarding logistics (Boyer, Prud’homme and Chung, 2009). Gevaers, Van de Voorde and Vanelslander, (2009) stated that the direct consumer deliveries started in the 1980's with the mail order companies. The growing importance of online technologies the past decades such as internet have raised the costs related to the last mile deliveries from 13% to 75% of the total costs of the supply chain. Indeed, the development of e- commerce has changed the way consumer are buying items by staying at home with home deliveries (Slabinac, 2015) and according to Boyer, Prud’homme and Chung (2009), a single delivery of grocery can cost between $10 and $20 for the transport company nowadays. This can be explained by the urbanisation of cities and thus the difficulties to have efficient transport and on the other hand the expectations of customer which are necessary higher since rapid deliveries are expected (Slabinac, 2015).
According to Boyer, Prud’homme and Chung (2009), a product can be delivered to the final customer by four different last-mile delivery types as follows:
"1. Semi-extended supply chain (store-based fulfilment and indirect delivery) 2. Fully-extended SC (store-based fulfilment and direct delivery)
3. Decoupled supply chain (fulfilment via DC and indirect delivery) 4. Centralised extended SC (fulfilment via DC and direct delivery)"
When choosing a type of delivery, companies also have to find the balance between four critical factors which are "customer convenience, delivery costs, picking efficiency and capital investment". By choosing the best options, companies will then try to avoid the main issues linked to the last-mile delivery presented by Gevaers, Van de Voorde and Vanelslander (2009) which are the attended home deliveries when the customers are not at home, the low consumer density with long runs for the delivery man, the secure reception problem and the returns.
As stated in the Ertrac report (2014), new concepts for the design of distribution centre and infrastructure must be found in order to have a more efficient last-mile delivery.
Slabinac (2015) discussed the necessity to introduce innovative types of delivery vehicles to reduce the negative ecological and social impact of transport on cities.
2.2 Courier, Express and Parcel Sector
The Courier, Express and Parcel (CEP) sector has emerged over the last 25 years from the traditional transport of less than truckload (LTL) cargo, and is considered as a very strategic and dynamic sector involved in globalization (DHL, 2008; Ducret, 2014). The CEP services are characterized by high shipping volume with low weights per parcel, and parcels weighing less than 31,5 kilograms in order to be handled by a single person. These services rely on sophisticated networks making possible fast shipments and punctuality for delivery times (DHL, 2008). According to the report from AtKearney (2015), the CEP market in Europe represented a volume of €43,1 billion, for 5,4 billion shipments in 2013.
The CEP industry is the combination of three different services that can be distinguished: courier, express and parcel services. The courier service concerns mostly the shipments of valuable goods, including a permanent personal supervisions and easy customer access to the shipments to re-arrange it at any time (DHL, 2008).
The couriers provide seamless transport and take care of the documentation, the average weight of shipment is 1,5 kilogram, with delivery the same or next day for national shipments. The market is fragmented in many small companies, and the services could be national or international (DHL, 2008). The express services consist of rapid and reliable deliveries for all kinds of documents and parcels (Dieke et al.,
exclusive personal way, it is however done by one company using its own network (DHL, 2008). To ensure speed in deliveries, the express providers often use their own air transportation service, which could span the entire globe (DHL, 2008; Dieke et al., 2013). The parcel services are characterized by the transport of standardized packages with delivery time of two or three days nationally. The longer delivery time allows higher level of consolidation, and a scheduled road transport, resulting in cheaper deliveries (Dieke et al., 2013). Since the services are focused on quantities, and the packages are standardized, operations and information technology (IT) processes can be highly automatized (DHL, 2008). Ducret (2014) summarized these three services quickly: “couriers provide a point-to-point same-day delivery; express providers supply fast delivery at fixed time windows the next day or the second day relying on their powerful networks; and parcel providers are characterized by the consolidation of standardized light-weight parcels delivered the next or second day”.
While a clear frontier between these three business segments existed a decade ago, researchers agree on the fact that nowadays the frontier is blurred (DHL, 2008; Dieke et al., 2013, Ducret, 2014). Indeed, the main CEP actors provide each of these services (Ducret, 2014). Dieke et al. (2013) identified two main reasons behind this phenomenon. First, the delivery times within the parcel sector has improved during the last years, and additional services such as tracking are available, which has significantly reduced the difference between express and parcel services. Second, business customers tend to switch from express to parcel to save costs, a move triggered by the economical crisis in 2008. However, it has also been argued that this could be due to the customer’s willingness to have all transport services provided by a single source (DHL, 2008).
Regarding the different actors operating in the CEP industry, Ducret (2014) recognizes three families of players. The first one is called “the heirs”, which represents the traditional players of the industry, such as national post office, express providers or couriers (Ducret, 2014). Among them, DHL, TNT and UPS are dominating the European market, leaving only a small market share to the remaining smaller companies (DHL, 2008). These important actors are called integrators, since they provide all the services along the entire transport chain within their own closed system (ibid.). Historically, the heirs have had to evolve under constraints, first with the liberalization of the sector, and then with the growth in B2C parcel delivery due to the e-commerce expansion (Ducret, 2014). Therefore, the heirs have been forced to strengthen their position due to the arrival of new players in the parcel distribution, by innovating with IT or creating partnerships with new players to “keep an eye on them”
(Ducret, 2014).
Consequently, the second family is called “the new players” and is made of recent companies, rather small, which are for the most specialized in urban parcel delivery (Ducret, 2014). These companies are characterized by their focus on innovation and sustainability, and aim to provide efficient solutions for the last-mile deliveries. Within
the family, four different kinds of actors can be found: pickup point networks, postal authorized players, specialized delivery service providers and players from the e- commerce sector (Ducret, 2014). Most of them are subcontractors of bigger actors of the supply chain, and manage to deliver only a small amount of parcels. However, actors from the e-commerce can be considered as competitor as they began to enter the transport sector (Ducret, 2014). As an example, according to Berman (2014), Amazon has sent a warning message to the industry, since the company is already exploring alternatives to bypass the traditional transport providers.
The third family is named “other logistics providers” and includes logistics providers specialized in the upstream activities of the supply chain. Due to the evolution of their customers’ strategy because of the growth in e-commerce, they had to face an increase in urban parcel deliveries (Ducret, 2014). Therefore, they developed urban parcel delivery activities in parallel with their regular activities of heavy freight, goods and pallets. To do so, some actors create urban delivery services, or create some partnerships with new players just like the heirs did (Ducret, 2014).
Two main trends are discussed in the literature regarding the current situation in the CEP industry: the growth in B2C volume and the issue of urban goods distribution.
Indeed, the e-commerce continues to fuel the B2C flows, now surpassing the B2B volume in every European country, which is due to the flow of products sold, but also to the flow of products returned (AtKearney, 2015). In this regard, it has been argued that the logistics costs in e-commerce are high, and that a market mostly based on free delivery and return would probably not be sustainable in the long-term (KPMG, 2015). Even if a majority of transport providers seems to increase their focus on the B2C deliveries as it is considered as the most promising business segment, some challenges remain such as the last-mile issue and the proposition of adequate return solutions (AtKearney, 2015). Whereas established logistics companies are still facing difficulties to provide adequate last-mile delivery solutions by partnering with their peers and e-retailers, new players are showing the example on how it can be achieved on a micro-level by using crowdsourcing and IT (KPMG, 2015).
The second trend in the industry is that urban goods distribution has become an issue for the cities and authorities, for different reasons such as the economy, the environment or public health (Ducret and Delaître, 2013). Due to the implementation of regulations in urban logistics, a new segment of CEP called “urban parcel delivery service” seems to emerge (ibid.). The demand for shorter transit times and more frequent deliveries, the growth of B2C deliveries, and the development of home deliveries by physical retailers to cope with e-commerce, are among the reasons behind the last-mile issues and the urban distribution issues (Ducret and Delaître, 2013; AtKearney, 2015). Consequently, intra-city couriers and same-day delivery
To conclude, the CEP industry is experiencing a constant growth supported by online and multi-channel retailing. The frontier between the three sectors is less and less distinct with the main actors operating in each of the three. Although the market is growing, it does not go without any problems. Firms have to cope with the last-mile issues, and urban areas increasingly regulated. Thanks to innovative and sustainable business models, the new players seems to play their cards right. They take advantage of the current situation to create partnerships with the heirs, online and traditional retailers, to capture market share in the last-mile deliveries.
2.3 Transport and the crowd 2.3.1 Sharing economy
Transportation, products and apparel, hospitality, office rental, labour and banking are all some examples of institutions having been disrupted quite recently by a new economic model (Owyang, 2013). Either called collaborative or sharing economy (Owyang, 2013; Malhotra and Van Alstryne, 2014), collaborative consumption (Botsman and Rogers, 2010; Belk, 2014), or peer-to-peer business (Sundararajan, 2014), this disruptive economic model seems to affect every sector of society, business and government (Owyang, 2013). While Belk (2014) defines collaborative consumption as “people coordinating the acquisition and distribution of a resource for a fee or other compensation”, Cohen and Kietzmann (2014) describe it as business models “where people offer and share underutilized resources in creative, new ways”.
A report from Ernst & Young (2015) specifies that the sharing economy is built around the sharing of human and physical resources, indeed, it is interesting to highlight that it can concerns goods as well as services.
The sharing economy encompasses many sectors but the most successful are transportation, hospitality and food & beverages (Ernst & Young, 2015). Among the best-known companies are the car sharing Uber and the ride sharing BlaBlaCar for transportation, Airbnb for hospitality, and Just-Eat for online takeaways ordering.
While it was worth $3.5 billion in 2012, the sharing economy was estimated at $26 billion in 2013 and is expected to reach a tremendous $115 billion by 2016 (Malhotra and Van Alstryne, 2014; Ernst & Young, 2015). Researchers agree on three main drivers that could explain such a growth (Owyang, 2013; Cohen and Kietzmann, 2014;
Sundararajan, 2014). First, the omnipresence of Internet and digital technologies allowing sharing at a scale never reached before. Second, the environmental awareness which leads people to take resources into considerations. And third, the urbanization of our world which makes sharing of assets or resources easier due to geographical vicinity. Also, economic drivers are mentioned with the monetization of idle capacity (Botsman and Rogers, 2010) and the “access over ownership”, people who can’t afford products can now rent them (Owyang, 2013). Although Cohen and Kietzmann (2014) evoke the 2008 global financial crisis as a reason behind the expansion of the sharing economy, Botsman and Rogers (2010) rebut this view.
Despite the fact that the sharing economy has been the nest for the creation of completely different businesses, Sundararajan (2014) explains that they rely on a common structure. He distinguishes three different constituents: platforms, entrepreneurs, and consumers. The platforms are the organization providing and organizing the “marketplaces”, the entrepreneurs are the persons or small businesses creating the offer, and the consumers are the one creating the demand (Sundararajan, 2014). With the example of Airbnb, the platform is Airbnb, the entrepreneurs are the hosts and the consumers are the people paying for the accommodations.
More than sharing a common structure, the sharing economy businesses seem to face the same issues. The platforms are facing regulatory considerations since they are regularly accused to violate existing regulations (Owyang, 2013; Ernst & Young, 2015). Among other examples, France banned “UberPop” the low-cost service from Uber, which used drivers lacking a professional driving license allowing them to pick- up passengers (Scott, 2015). Tax compliance appears to be another problem for the sharing economy, which is often accused of unfair competition (Ernst & Young, 2015).
To exemplify, Airbnb faces legal troubles in many countries since they are expected to pay “hotel or tourist tax”, something they do not (Coldwell, 2014). Incumbent players have repeatedly condemned these new businesses which threaten their activities (Owyang, 2013). Another issue for the sharing economy is the lack of trust between consumers and entrepreneurs combined with safety issues (Owyang, 2013; Ernst &
Young, 2015). Moreover, as highlighted by Sundararajan (2014), theses new services come along with new questions of liability, hence the necessity to bring new kinds of insurance. It is especially the case when goods not supposed to be shared are now proposed to everyone against payment.
Existing or proposed solutions to these problems can be found in the literature.
Malhotra and Van Alstryne (2014) call to mind that the city of Amsterdam already support the sharing economy by imposing “wise” tax, hosts have to pay tourist taxes like professionals, but do not have to pay other taxes imposed at industrial level.
Regarding the trust and safety issues, community policing and self-regulations could be the solutions (ibid.). Indeed, the platforms’ preoccupations are to provide safe and trusted services because their revenues rely on volume and expansion of their operations (Sundararajan, 2014). They are also the closest to the transactions and therefore can act quickly removing users who violate the regulations. In addition, the platforms have created identity verification processes and credit scoring systems (Sundararajan, 2014), and also reputation systems and social networking features such as integrated Facebook connection (Owyang, 2013). All together these “trust mechanisms” seems to currently make the exchange easier for most of the sharing economy companies without additional external policies from the authorities (Sundararajan, 2014).
2.3.2 Crowd-logistics
The combination of shared economy and logistics is often called crowd-logistics. In the 2014 issue of the DHL Logistics Trend Radar (Bubner, Helbig and Jeske, 2014), crowd-logistics is acknowledged as a promising trend within the next 5 years.
Mehmann, Frehe and Teuteberg (2015) after conducting a systematic literature review and a case study about crowd-logistics give this definition: “Crowd Logistics designates the outsourcing of logistics services to a mass of actors, whereby the coordination is supported by a technical infrastructure. The aim of Crowd Logistics is to achieve economic benefits for all stake- and shareholders". The “technical infrastructure” aforementioned is similar to the “platform” presented in the previous part.
Crowd-logistics services could allow to make the best use of the 60% of the available transport capacity currently not used, resulting in reduced transportation costs and C02 emissions (Bubner, Helbig and Jeske, 2014). It enables both the creation of new logistics services and the improvement of traditional services in terms of volume, speed and flexibility (Mehmann, Frehe and Teuteberg, 2015). According to Bubner, Helbig and Jeske (2014), new strategies relying on the crowd to outsource first and last mile activities by combining professional processes with daily crowd routines represent new opportunities and challenges for logistics providers. Indeed, traditional actors have to compete with a proliferative start-up driven market, which leads them to create new business models relying on “professional and non-professional services, sources and capabilities” (Bubner, Helbig and Jeske, 2014). This is consistent with what Carbone, Rouquet and Roussat (2015) argue, that is, crowd-logistics represents both a threat and an opportunity for logistics service providers. An opportunity since it opens up new prospects, and a threat because the crowd could capture some of their business volume.
2.3.3 Crowdsourced delivery
Crowd-shipping or crowdsourced delivery is one part of the crowd-logistics, and is defined by Lam and Li (2015) as: ”a web or mobile-based courier service which leverages large groups of geographically dispersed individuals to match demand with supply digitally.” Therefore, it relies on the Internet in any case, and often exploits the technological potential of geolocalization and mobile applications (Rougès and Montreuil, 2014).
The reasons are many behind the recent emergence of these services. According to Rougès and Montreuil (2014), it is an answer to the customers’ changing needs towards faster, personalized and cheaper delivery service. This is in line with Lam and Li (2015) who argues that in the current world of speed, retailers are seeking to reduce their delivery costs while increasing the speed of delivery and the convenience, in order to improve the customer experience. Also, the development of e-commerce which fuels the flow of parcels is another factor (AtKearney, 2012;
Rougès and Montreuil, 2014). On the one hand online retailers are willing to develop more efficient deliveries (e.g. same day deliveries, free returns etc.), which could be handle through crowdsourced delivery. On the other hand, “physical” retailers are looking for a way to equal the comfort of shopping from home because they are suffering from the competition of e-commerce, and crowdsourced delivery could once again be the solution (Rougès and Montreuil, 2014). Lastly, since the transport of parcels is growing, the externalities (emissions, noise, etc.) linked to this are also growing, and crowdsourced delivery could participate to the reduction of the environmental impacts (Rougès and Montreuil, 2014; Paloheimo, Lettenmeier and Waris, 2015).
Rougès and Montreuil (2014) have developed a typology of business models in the crowdsourced delivery industry. They identified five types of business models allowing the categorization of every existing service in this industry. The first one is the
“Courier” business model, with a Business-to-Consumer (B2C) orientation and an intra-urban scope. The customer orders from a shop online and apply for a home delivery, which is included in the payment. A courier, either professional or non- professional, delivers the order. The second is the “Intendant” business model, with the same characteristics as the “Courier” business model. The difference lies in the fact that the customer places an order on a platform, and the courier performs both purchase and delivery, from the shop specified by the customer. The third is the “Intra- urban” business model, with a predominantly peer-to-peer orientation, and an intra- urban scope as its name suggests. The entity wishing to have its parcel delivered places an order on a platform, which is then carried out by a courier or a commuter, for a fixed price. The fourth is the “National” business model, with a predominantly peer-to-peer orientation, and an inter-urban or national scope. It works exactly as the
“Intra-urban” business model, but the parcels are transported by travellers due to the long distances involved, and the prices can be negotiated between the peers. The last one is the “Social delivery” business model, which is also mostly peer-to-peer oriented, but with a national or international scope. The customer places an order on a platform, which is carried out by a traveller who purchase the specified product, and deliver it on its way for a negotiated price. The five business models are summarized in table 1.
Table 1 : Business models in Crowd-shipping Own illustration based on Rougès and Montreuil (2014)
These new crowdsourced delivery services have numerous benefits for the stakeholders. Businesses can decrease their logistics costs and customers enjoy cheaper deliveries compared to traditional deliveries (Rougès and Montreuil, 2014;
Lam and Li, 2015). It also helps to decrease the externalities linked to transport such as congestions, emissions, etc. since services can be provided by people already on their way, and cleaner modes of transport can be used such as bicycle and public transports (ibid.). Flexible job opportunities are also created so that it generates wealth to the society (ibid.). Lam and Li (2015) add that these services can provide flexibility to companies’ logistics because the workforce is available on-demand, and it can also contribute to meet the growing demand for the e-commerce logistics. The service’s speed is another advantage, couriers can be available at any time of the day while traditional companies offers mostly one tour per day (Rougès and Montreuil, 2014). The personalization is also higher since courier and customer can arrange together the schedule and characteristics of the service. Finally, it gives the possibility to customers to access products otherwise unavailable, such as products sold in foreign places, or restaurants without delivery service etc. (Rougès and Montreuil, 2014).
However, crowdsourced delivery must cope with many issues, some of which are common with the ones generally faced by the sharing economy. Many safety issues arose, such as theft, damage, transport of illegal products etc. and this goes along with liability concerns, since it is unclear concerning the entity which is responsible in case of problems (Lam and Li, 2015). There are also concerns about the privacy, when retailers may need to share customers’ information such as home addresses or shopping habits with an unknown courier (ibid.). Rougès and Montreuil (2014) highlight the trust problem, since it is easier to trust an employee from a reputable transport provider than a stranger. Also, the platform rely on the same kind of solution
mentioned previously for the sharing economy: secure payment, “log-in with Facebook”, ratings and feedbacks, etc. Another issue is what Rougès and Montreuil (2014) called “the question of critical mass”. Indeed, a certain amount of couriers is needed to provide flexible and responsive service, but a certain amount of customers is also crucial to attract couriers. Therefore, companies implemented several strategies such as hiring a team of professional courier to start the wheel, or partnering with high-volume retailers in order to ensure a critical volume to attract courier (Rougès and Montreuil, 2014).
2.4 Summary of literature review
The literature review shows that urban goods transport is of crucial importance for the economic development and prosperity of the cities. However, due to the conflicting interests of numerous stakeholders involved, and the negative impacts inherent in the transport, cities have been forced to implement urban transport regulations that impede transport providers. The CEP industry activities represent a significant part of the urban goods transport, and are experiencing a constant growth supported by online and multi-channel retailing. Although the market is growing, it does not go without any problems for the firms, which have to face the last-mile issues within increasingly regulated environments. This situation has led to the emergence of specific urban parcel delivery services in the industry. Thanks to innovative and sustainable business models, the new players seem to play their cards right. They take advantage of the current situation to create partnerships with the heirs, online and traditional retailers, to capture market share in the last-mile deliveries. Among the new players, actors from the sharing economy take advantage of underutilized resources to make a more efficient use of the available transport capacity. The sharing economy is already a significant market, and is growing exponentially. But because of its newness, it is accepted in completely different ways across the world, and is suffering a lack of adapted regulations. However, the crowd-logistics is considered as an environmentally sound solution to the capacity problem in urban distribution, and crowdsourced deliveries are seen as suitable to face the growth in B2C deliveries, and as a way for physical retailers to cope with e-commerce, especially in urban areas. The impacts and challenges resulting from the implementation of crowd-shipping services in urban areas are not yet clearly defined in the literature. Therefore, this deficiency in the literature is identified as a gap that this paper should contribute to fill.
3 - Methodology
This chapter discusses the research philosophy, classifications and research strategy.
Furthermore, it describes the data collection and the limitations of the research design chosen to address this study.
3.1 Research philosophy
Identifying a research paradigm is essential since it is a philosophical and thinking framework that guides how the research should be conducted and the behaviour of the researcher (Wahyuni, 2012; Collis and Hussey, 2014). The two main paradigms are positivism and interpretivism, and are each located at one end of the continuum of paradigms (Collis and Hussey, 2014). A research paradigm can be described according to four main philosophical assumptions underpinning it: ontological, epistemological, axiological and methodological (Saunders, Lewis and Thornhill, 2009;
Wahyuni, 2012; Collis and Hussey, 2014).
This paper is designed as a qualitative study, and will therefore rely mainly on qualitative data. As argued by Collis and Hussey (2014), an interpretive study can be any type of research where the findings are not derived from the statistical analysis of quantitative data. Interpretivist researchers prefer to work with qualitative methods based on qualitative data (Wahyuni, 2012; Collis and Hussey, 2014). Consequently, this thesis can be considered as rather interpretivist.
Regarding the epistemological assumption, the authors of this paper favour interaction, dialogue, participative inquiry, and tend to minimize the distance with what is researched to collect valid knowledge, which is typical of the intrepretivism (Wahyuni, 2012; Collis and Hussey, 2014). Interpretivists believe that understanding the differences between humans as social actors is of importance, and emphasize the difference between conducting research among people rather than objects (Saunders, Lewis and Thornhill, 2009). As this paper will partially rely on stakeholders’ thoughts and interests, it brings it closer to interpretivism.
The same observation can be done according to the ontological assumption, which is concerned with the nature of the reality (Collis and Hussey, 2014). Indeed, the results of this paper will not be independent of the social actors involved. Therefore, the social reality is subjective, and there are multiple realities due to the multiple actors involved (Wahyuni, 2012; Collis and Hussey, 2014). Furthermore, the authors of this paper study the social reality from their perspective, and implicitly consider that they have “values”, which substantially influence the data gathering and the conduct of the study. Consequently, this paper can be seen as rather interpretivist in accordance with the axiological assumption, which is concerned with the role of values (Collis and
Hussey, 2014).
